Old Court Savings and Loan Association, the Baltimore thrift that triggered Maryland's savings and loan crisis last month, invested more than $61 million in resort ventures here over the past three years, including $6.9 million in loans to companies co-owned by the thrift's president, land records here show.

The loans to five local companies owned by Old Court President Jeffrey Levitt and one of his business partners were never approved by the thrift's board of directors or disclosed to state regulators under Maryland's conflict-of-interest procedures, according to state officials. The $6.9 million in loans substantially expand the scale of insider dealing at Old Court previously identified by state investigators.

Two industry experts who reviewed these resort area loans said that, in their opinion, many of the ventures seriously risked depositors' funds because they were secured by properties worth far less than the value of the loans. A lawyer for Levitt disputed this yesterday, saying "independent appraisals" of those properties showed that Old Court's interests were protected.

Meanwhile, some of the thrift's investments here appear to be having difficulties. The Old Court-financed Williamsburg Plaza shopping mall, for example, has had problems attracting tenants and was more than two-thirds vacant as the summer tourist season began this month.

Old Court was among the most active of several Maryland savings and loans that have speculated in the "go-go" market of Ocean City resort development, a market that has boomed during the past several years. Old Court provided financing for more than 17 projects, ranging from time-share condominiums and bayside developments to a miniature golf course and carwash, both co-owned by Levitt.

Old Court was "involved in the most speculative end of the business in Ocean City," said Henry Berliner, president of the Second National Savings and Loan in Annapolis. "There isn't a bank in the state of Maryland that would make the kind of loans they were making . . . . They were a true diversion of the resources of the savings and loan to benefit a small group of insiders."

Levitt did not return several telephone calls to his office, and one of his lawyers, William Hundley, said he would be unavailable for comment. Hundley said Levitt has been in Ocean City, where he was working on the opening last week of a new Gucci's store, owned by his wife, at the Williamsburg Plaza.

"He thinks Ocean City is a good investment, and he thinks it will ultimately turn out okay," said Hundley. Asked about the shopping center, Hundley added: "He thinks . . . the Gucci's will save the day."

Paul Mark Sandler, another Levitt lawyer, declined to comment on the investments, but he said, "These sort of generalizations don't do much except arouse and tantalize the prurient interests of the public . . . . We're not going to tell you our reasons for doing things when there are investigations under way."

Disclosure of management problems at Old Court in early May created a massive drain on deposits that quickly spread to other Maryland thrifts, prompting the state to place Old Court under conservatorship.

Also, the General Assembly was forced to abolish the state's system of private insurance for savings and loans and place sharp restrictions on the withdrawal of deposits in state thrifts. Maryland Attorney General Stephen H. Sachs opened a criminal investigation into Old Court's business dealings.

Levitt, a 42-year-old lawyer from Baltimore, owned 41 percent of the stock in Old Court, which he bought in 1982 with two other investors, Allan H. Pearlstein and lawyer Jerome Cardin. As the thrift's president and a member of its board of directors, Levitt was the guiding figure at Old Court and personally oversaw much of its operations, according to state officials.

According to land records here and state officials, Levitt and a local business partner, developer Walter Otstot, received four Old Court loans last Oct. 3 totaling $6.5 million to purchase stores in Williamsburg Plaza. Another Levitt-Otstot venture called Jeff and Walt's Air Service received a fifth loan of $400,000 the same day.

Under state law, loans to a thrift's officers and directors generally are prohibited unless they are approved by a vote of two-thirds of the association's board of directors and the director of the Maryland division of savings and loan.

The minutes of Old Court board meetings do not show any discussion or approval of the Ocean City loans, according to a state official who has had access to the records. There is also no record that the loans were ever disclosed to or approved by the state division of savings and loan, says William LeCompte, deputy director of the division.

Levitt lawyers Hundley and Sandler said they would not comment on the loans to Levitt's partnerships.

Sachs, who is investigating the Ocean City deals as part of his probe into Old Court, is also looking into the thrift's relationship to Otstot.

A heavyset businessman who sports a goatee and drives a Rolls-Royce, Otstot was described by one state official as Levitt's "deal maker" and "point man" in Ocean City. Otstot served as general partner and half-owner for at least six development ventures that he jointly undertook with Old Court's subsidiary, Old Court Joint Ventures Inc.

Otstot received $730,419 in fees from Old Court and two of its wholly owned subsidiaries in 1984, according to documents filed by Sachs in support of the state's petition to place Old Court under conservatorship.

One state official, who asked not to be identified, said Old Court records show that Otstot had a $40,000-a-month consulting contract with Meridian Mortgage Inc., another wholly owned Old Court subsidiary. There is no explanation of what work Otstot performed for that fee nor what he did for other fees he received from the thrift, the official said.

Otstot did not return several calls to his Ocean City office. H. Russell Smouse, a Baltimore lawyer who is representing Otstot, said that in light of Sachs' investigation, "It would be inappropriate to say anything at this time."

Asked about the Old Court payments to Otstot, Hundley said they represented "fees on legitimate business closings." He declined to elaborate.

Sachs' petition filed in Baltimore Circuit Court last month charged that Old Court had repeatedly violated state financial regulations, making at least $5.8 million in unsecured insider loans and paying $2 million in management and consultant fees to Levitt or companies in which he had a financial interest.

The clearest example of Old Court's unorthodox financing in Ocean City can be found in the development and sale of the Williamsburg Plaza shopping mall. See related chart.

Old Court made three loans totaling $4.7 million to build the mall to 127th St. Center Limited Partnership, which was jointly owned by Otstot and a wholly owned Old Court subsidiary called Old Court Joint Ventures Inc.

After the mall's completion last October, the partnership sold all the stores in the mall for $6.5 million -- again with all the financing coming from Old Court. The buyers were four newly formed partnerships that were jointly owned by Otstot and Levitt, the records show. The original construction loans were paid back by 127th St. from the proceeds of the sale of the stores, according to a state official.

Berliner and William Sinclair, president of Washington Federal Savings and Loan, said the terms of the loans involved in the plaza significantly deviated from standard industry practice and would not have been approved by their institutions.

The $6.5 million purchase price was nearly double the $3.4 million that was the "full market value" of the stores in January, as appraised by the Worcester County assessor's office, according to Gary Flater, county commercial real estate assessor. The stores were Old Court's only security on the loans, according to land records.

Industry officials said that, in their opinion, the small value of the security pledged leaves Old Court highly vulnerable in the event of a default. But Levitt's lawyer Sandler said yesterday that "independent appraisals demonstrated the value of the stores was at $8 million to $9 million." He declined to elaborate.

Another unusual aspect of the loan arrangement awarded Levitt, as trustee for Old Court, a special fee in the event that his partnerships defaulted on the loans and the property needed to be sold in a foreclosure.

One industry expert said that the terms of the loans were so beneficial to Levitt that "it looked like he would win whether the mall succeeded or failed."

At the same time, the increased value of the new loans allowed Old Court to add to the value of its assets at a time when Maryland regulators were first beginning to question the thrift's financial health, according to Berliner and a state official familiar with the transaction.

The Williamsburg Plaza is also an example of what some critics today say was poor business judgment. It was built along Coastal Highway, in an area surrounded by at least three new competing shopping centers with more than 90 stores.

Local business persons say Williamsburg Plaza has been hindered by its design: It was constructed facing away from the highway, so drivers are unable to see any of the stores inside the mall.

"It's crazy -- I can't understand the rationale for that," said Jim Whittemore, president of the Ocean City Chamber of Commerce and manager of the rival Gold Coast Mall about a half-mile south of Williamsburg. "You can't even see anything from the road. It's hard to believe they were doing their homework."

Paul Herrmann, sales manager of the Magill Yerman, an Old Court realty affiliate that is leasing store space in the mall, said the design away from the street was intentional. "It was designed so you could have a nice, leisurely stroll without the dust and the dirt and noise from the highway," he said. "We didn't want to be a 7-Eleven or a strip center. We expect to be the finest retail store in Ocean City."

The mall appears to be having problems. On a recent rainy afternoon -- a time when two of the nearby shopping malls were packed with fleeing sunbathers -- the Williamsburg mall was virtually deserted. Only five of the 32 spaces for stores in the mall were occupied, and four of them are owned by either Levitt or Otstot, including the miniature golf course inside the mall and a carwash in front of it.

One tenant, Jay Maher, owner of the Quiet Storm clothing store, recently broke his lease and moved out because, he said, not enough customers were coming into the mall for his store to survive.

"The place looked like a morgue," Maher said.

The mall was not the only investment made by Old Court here that critics say was risky. The thrift financed the development of more than $20 million in property owned by Otstot entities, according to records of mortgages, deeds and partnership papers in Worcester County. Some of the transactions appear to have been financed for more than the market value of the property, and several of them came about as the thrift's own financial picture was worsening.

*Levot Limited Partnership -- owned by Otstot and Old Court -- bought a small rental property for $400,000 in 1983. Fifteen months later, it was sold to another developer for $5 million in a deal financed by Old Court.

County land records do not indicate if the property was significantly improved during the time it was held by Levot, but the building on the site is an older, three-story apartment or condominium that does not appear to be open for rental this summer.

Old Court lent Levot $600,000 to purchase the property in 1983, or $200,000 more than was paid for it. Old Court also financed the later sale for $5.5 million, or $500,000 over the sale price. Industry experts say it is very unusual for a lender to finance the purchase of a piece of property for more than the price, unless such a loan includes a construction loan for rehabilitation.

In the case of this and other Old Court transactions, said one savings and loan executive who reviewed the documents, it appeared that many of the loans gave the purchasers a "bonus" of several thousand dollars and left the thrift with loans in excess of the value of the property they were secured against.

*Old Court lent Bay Breeze Limited Partnership, in which Old Court Joint Ventures was a 50 percent owner, $3.05 million to build the Bay Breeze Inn, a condominium project. Then, early this spring, Otstot, as general partner in Bay Breeze Limited Partnership, turned over title to the project to Otstot Enterprises Inc. for no money.

It is unclear from the documents whether anyone from the savings and loan approved the deed transfer to Otstot Enterprises.

*The records show that on March 13, Old Court lent Otstot Enterprises $4.5 million with no record of any security. Industry experts say that any security that might have existed for that loan should have been noted on the loan documents filed with the county.

*Old Court lent Amber Waves Limited Partnership $4.1 million to purchase and develop Amber Waves Condominium several years ago. Levitt's sons, Ross and Sanford Levitt, held a 10 percent interest in the condominium.

Last year, Otstot, as general partner for the partnership, transferred to himself the title to four of the units at the condominium, three of which were to be left to his three daughters in the event of his death, according to deeds on record.

*Lloyd Hensley, another Ocean City developer, got a $4.2 million loan from Old Court to purchase the St. Tropez time-share condominium developed by another Otstot-Old Court partnership after he was turned down by several other financial institutions.

Lenders in Ocean City generally are wary of financing time-shares -- a traditionally speculative venture in which developers sell time intervals in a condominium unit rather than the unit itself -- ever since a 1983 scandal in which a company called Seatime Associates sold more than $1 million worth of time-shares in condominium units it did not own. Seatime was not connected to Old Court, Levitt or Otstot.

"I went to a lot of banks in Ocean City and they all threw me out," said Hensley. "They were all scared to death because of the Seatime fiasco. Levitt was the only one willing to finance it."

Other Ocean City development projects financed by Old Court during the last three years include:

*$5.5 million on Jan. 22, 1985, to Erin Properties for purchase of a building owned by an Otstot-Old Court limited partnership. Hensley is president of Erin Properties.

*$5.4 million on Jan. 31, 1985, to Sandy Square Limited Partnership for construction of a bayside condominium project.

*$996,000 on Dec. 7, 1984, to 57th St. Joint Venture. It is unclear from land records what sort of development this would be.

*$732,000 on Dec. 7, 1984, to Cross-Roads Venture Limited Partnership secured against an Ocean City property owned by the partnership.

*$4.5 million on Nov. 27, 1984, to Isle of Wight Joint Venture. It is unclear from land records what sort of development this would be.

*$600,000 on Nov. 15, 1984, to G&B Construction Co. for construction of the Bermuda Bay Townhouses.

*$1.5 million between October 1983 and July 1984, to 61st St. Limited Partnership for a bayside development project just south of the 62nd Street bridge into Ocean City.

*$6 million on Aug. 25, 1984, to O.Z. Enterprises Inc. for purchase of a lot on 32nd Street. Hensley is president of O.Z. Enterprises.

*$3.5 million between September 1983 and July 1984, to Crab Cove Joint Venture for construction of the Crab Cove condominium.

*$2.67 million on Aug. 11, 1984, to Regency Surf Associates. It is unclear from land records what sort of development this would be.

*$700,000 on July 18, 1984, to Harbor Bay Builders Inc. It is unclear from land records what sort of development this would be.

*$500,000 on April 13, 1984, to Fenwick Development Joint Venture for development of a condominium project.